First Capital subsidiary faces CSRC penalty for due diligence lapses

First Capital Securities Underwriting & Sponsorship Co., Ltd., a wholly-owned subsidiary of First Capital Securities, received an advance notice of administrative penalty from the China Securities Regulatory Commission (CSRC) Jiangsu regulatory bureau on December 5, 2025. This penalty stems from alleged negligence in ongoing supervision duties during the 2019 convertible bond project for Hongda Xingye Co., Ltd.

The CSRC Jiangsu regulatory bureau proposes to order First Capital Securities Underwriting & Sponsorship Co., Ltd. to rectify its issues, issue a warning, confiscate its sponsorship business income of yuan 4,245,283.02, and impose a fine of yuan 12,735,849.06. Additionally, responsible individuals, Song Yao and Fan Benyuan, are to be warned and fined yuan 1,500,000 each. The proposed penalty will not have a significant adverse impact on First Capital Securities' operations, financial condition, or solvency.